2014 ‘Record year’ for bond market; New listings double to P190B

The Philippine fixed-income market marked a record year in 2014, with new bond listings more than doubling in volume to an all-time high for the country of P190 billion.

Cesar Crisol, Philippine Dealings and Exchange Corp. (PDEX) chairman and chief executive officer, told The Manila Times that many of the companies that issued the bonds used the proceeds to fund the expansion of their operations.

“Last year was about P190 billion. It was a record year. There were new issues and a lot of the issuers were using the funds for their expansion,” Crisol said on Monday after the BDO Unibank Inc.’s maiden listing of P7.5-billion long-term negotiable certificates of deposits (LTNCD).

Last year’s new bond listings reflected a big jump in volume from P83 billion listed in 2013.

“It is basically for infrastructure projects, power projects, as well as real estate developments,” Crisol added.

In the first half of 2014, the PDEX raised P20.99 billion from three debt issuers, including P7.5 billion from Banco de Oro (BDO), P1.49 billion from Phoenix Petroleum Philippines Inc. and P12 billion from Robinsons Land Corp.

“[For this year,] we will try if we could at least come to par with last year’s P190 billion. We’re hoping we could still hit that level. If not in the number of issuers, at least the amount,” Crisol said.

“We’re confident that as we move toward the second half of the year there’ll be more issuers, considering various infrastructure projects are getting realized. And the global indication and the interest rates are moving here, so issuers would probably want to take advantage of the good market,” he added.

Crisol said companies that plan to issue bonds this year are likely to be engaged in the business of infrastructure development, energy and power generation, real estate and services.

Raising funds from corporate debt notes remains attractive to companies listed on the Philippine Stock Exchange, which gives alternative funding for firms other than bank loans.

Bond issues also provide companies access to a wider array of investors, whether local or foreign, institutional or retail.

“Also, companies would be able to get or maximize market rates, considering that the debt market is now profitable. They are taking advantage of low interest rates at present,” Crisol said.

“As we open the second quarter of this year with BDO’s P7.5-billion LTNCDs, we remain optimistic that 2015 will also be a landmark year for our issuer sector. We look forward to the vibrancy of this market as we witness once again listing after listing from our issuer community,” he added.

PDEX’s inventory of outstanding listings so far consists of 91 securities, amounting to P486 billion, as issued by 32 companies.